Private house sale, how to proceed?

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David321

485 posts

Ultimate Geek

#306956 7-Sep-2023 09:22

Hi all,

My wife and I were looking to sell our house soon, we figured this would mean going through an agent which would no doubt make the process a little easier than going private, but we have since found some potential private buyers, the daughter of a work college and her partner. We figure this way we can avoid the commision of an agent, avoid the waiting for potential buyers to make an offer, and the open homes.

Basically we have to weigh up, do we want to go through the hassle cost of an agent who may get a slightly more than the house is valued at but take their commision, or do we go with the private option and set the price at the value of the house and have a speedy and cheaper sale with favourable settlement terms (we want to stay a few months after the contract goes unconditional). I am leaning towards the private option.

I am interested in two things, what would be a reasonable way to agree on a value for our house, we don't want to rip anyone off but we also obviously want what it's worth (at least), I figure getting a private valuation would be the way to go and setting the price at that, but I have heard that sometimes these are inaccurate? Not sure how true that is though as I dont think banks would request them if they were not accurate?

The second thing is, apart from the sale and purchase agreement which would would be done by lawyers, is there anything else that needs to be done, eqc or otherwise? I feel like this is ne of those things where if something important is missed it could have big implications (or am I overthinking it?). I am a bit of a novice when it comes to this, I have never sold a house, weather through an agent or not.

_David_

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#3124452 7-Sep-2023 09:31

Get a lawyer experienced with real estate, take their advice on everything, including over any advice offered on public forums.

An agent works for you, their job is to get as much for the house as they can. A friend of mine who bought a house a couple of years ago said they really put pressure on them to up their offer to get them into the house, they paid more than they wanted to, so they have some value. I have no recent experience with agents though.

johno1234

2805 posts

Uber Geek

#3124471 7-Sep-2023 10:19

Wife and I (well wife, really) have quite a decent amount of knowledge and experience, and attempted a private marketing and sale about a year ago. It flopped. So we subsequently used a good real estate agent and made the sale about six months later. Unfortunately that left us several hundred $k worse off as the market had softened over that time.

I wouldn't bother again unless it was an amazing seller's market full of desperate buyers.

David321

485 posts

Ultimate Geek

#3124476 7-Sep-2023 10:29

johno1234:

Wife and I (well wife, really) have quite a decent amount of knowledge and experience, and attempted a private marketing and sale about a year ago. It flopped. So we subsequently used a good real estate agent and made the sale about six months later. Unfortunately that left us several hundred $k worse off as the market had softened over that time.

I wouldn't bother again unless it was an amazing seller's market full of desperate buyers.

I guess you did not have someone keen to buy like we do though? We don't need to market at all. Or have I missed something?

_David_

Earbanean

937 posts

Ultimate Geek

#3124479 7-Sep-2023 10:37

timmmay:

An agent works for you, their job is to get as much for the house as they can. A friend of mine who bought a house a couple of years ago said they really put pressure on them to up their offer to get them into the house, they paid more than they wanted to, so they have some value. I have no recent experience with agents though.

No, that's not really true. Ultimately, agents work for themselves. Their first major job is to get the listing - ideally an exclusive listing. They'll give you a price indication designed to do that, but are not held to that estimate in any way. Then their next job is to sell as quickly as possible. Often that involves moving you down from their initial estimate (using terms like "the market is telling us..").

It's important to remember that an extra $20k - $30k on price, makes a material difference to vendor and buyer, but not so much to the agent. Their percentage of that isn't really that significant, given the amount of their time possibly needed to secure it.

linw

2849 posts

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#3124484 7-Sep-2023 10:42

Bing seems to offer good advice! I put in "Selling a house privately in New Zealand"

SATTV

1648 posts

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#3124488 7-Sep-2023 10:50

I just sold recently, we went to Auction, we got $100k more than we were expecting.

This more than paid for the hassel of open homes etc.

There is a lot of doom and gloom in the media at the moment but there is a lot of comptition for good first homes.

Dont undersell youself.

But, if you do go down the road of not using an agent, get yourself a good lawer and get them to explain the pitfalls of not using an agent, they do more than just clipping the ticket.

Both parties should get a good valuation so you can compare the two.

Get a building inspection done so you have no suprises ( they need to get their own for independance )

While saving $40k or so is nice, there are some leagal headaches you open yourself up for hence speaking to a lawyer.

John

I know enough to be dangerous

David321

485 posts

Ultimate Geek

#3124490 7-Sep-2023 10:51

linw:

Bing seems to offer good advice! I put in "Selling a house privately in New Zealand"

Yeah I am looking around online also, still doesn't hurt to ask the friendly Geekzone community also to keep a broad range of information incoming!

_David_

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David321

485 posts

Ultimate Geek

#3124491 7-Sep-2023 10:53

SATTV:

I just sold recently, we went to Auction, we got $100k more than we were expecting.

This more than paid for the hassel of open homes etc.

There is a lot of doom and gloom in the media at the moment but there is a lot of comptition for good first homes.

Dont undersell youself.

But, if you do go down the road of not using an agent, get yourself a good lawer and get them to explain the pitfalls of not using an agent, they do more than just clipping the ticket.

Both parties should get a good valuation so you can compare the two.

Get a building inspection done so you have no suprises ( they need to get their own for independance )

While saving $40k or so is nice, there are some leagal headaches you open yourself up for hence speaking to a lawyer.

John

What area are you in and what was you house worth? 100k extra would certainly be nice, I can't see that happening with our house though being a 3 bedroom 1950's house in Hornby Christchurch.

_David_

eracode

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#3124511 7-Sep-2023 11:44

We did this - privately sold our house to some friends - but admittedly a long time ago. We agreed the process and agreed on a reputable Registered Valuer. The resulting valuation set an objective figure for the price. We had lawyers on both sides - the wife in our friends-couple was a lawyer. Very simple and worked well. It’s obvious but we effectively saved an agent’s commission and split it between us - was a win-win.

The lawyers need to do all the stuff they would normally do and handle the Agreement for Sale and Purchase. The purchasers’ lawyer needs to do a title search, check LIM etc - so no differences there. This is a ‘sale by private treaty’ and given that there’s no agent involved, if the purchaser is arranging a home loan, their bank will require a valuation report from a valuer who is acceptable to them. (Usually if it’s a situation of ‘willing seller + willing buyer + agent’, banks do not require a valuation report).

May be a bit different in the current market. As you say, not sure how a valuation will line up against the price that an agent might get for you - but I wholeheartedly agree with @Earbanean ‘s comment above.

Sometimes I just sit and think. Other times I just sit.

eracode

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#3124535 7-Sep-2023 12:26

Earbanean:

timmmay:

An agent works for you, their job is to get as much for the house as they can. A friend of mine who bought a house a couple of years ago said they really put pressure on them to up their offer to get them into the house, they paid more than they wanted to, so they have some value. I have no recent experience with agents though.

No, that's not really true. Ultimately, agents work for themselves. Their first major job is to get the listing - ideally an exclusive listing. They'll give you a price indication designed to do that, but are not held to that estimate in any way. Then their next job is to sell as quickly as possible. Often that involves moving you down from their initial estimate (using terms like "the market is telling us..").

It's important to remember that an extra $20k - $30k on price, makes a material difference to vendor and buyer, but not so much to the agent. Their percentage of that isn't really that significant, given the amount of their time possibly needed to secure it.

Precisely! Spot on.

Sometimes I just sit and think. Other times I just sit.

traderstu

332 posts

Ultimate Geek

#3124542 7-Sep-2023 12:44

Agree with much of what has been said above. We sold our second to last house privately. Would do it again.

There is no benefit to you to get real estate agents involved at this stage except it could help with arriving at a valuation if you found a couple of agents willing to do appraisals with no obligation on your part. After you have agreed price and any other conditions verbally, my one piece of advice is to get the purchaser/your friends to get the sale and purchase agreement prepared. This way you are not out of pocket if they change their mind.

Earbanean

937 posts

Ultimate Geek

#3124612 7-Sep-2023 13:49

traderstu:

Agree with much of what has been said above. We sold our second to last house privately. Would do it again.

There is no benefit to you to get real estate agents involved at this stage except it could help with arriving at a valuation if you found a couple of agents willing to do appraisals with no obligation on your part. After you have agreed price and any other conditions verbally, my one piece of advice is to get the purchaser/your friends to get the sale and purchase agreement prepared. This way you are not out of pocket if they change their mind.

I think you're much better off paying to get a valuation from an independent valuation company, rather than a real estate appraisal. When we bought our current house, we got a valuation report and building inspection (from different companies). The valuation cost about $1,500, but my work paid for it, because we were being transferred to Auckland. They were incredibly thorough, analysing sales histories and trends, inspecting the house and doing comparisons with other houses with similar characteristic, etc. It gave us a price target and likely range around that, which gave us a lot of confidence in our negotiations. When we sell I will definitely get another valuation and happily pay for it. It's a miniscule fraction of the cost of the house.

With important transactions of any sort, I think it's critical to always consider what the motivating factors of the counterparties you're dealing with are. I've mentioned those for real estate agents above. in contrast, an independent valuer's only motivation is to be as accurate as possible. They have no vested interest in their estimate being higher or lower, but their reputation for accuracy is important to them.

SATTV

1648 posts

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#3124683 7-Sep-2023 16:14

David321:

SATTV:

I just sold recently, we went to Auction, we got $100k more than we were expecting.

This more than paid for the hassel of open homes etc.

There is a lot of doom and gloom in the media at the moment but there is a lot of comptition for good first homes.

Dont undersell youself.

But, if you do go down the road of not using an agent, get yourself a good lawer and get them to explain the pitfalls of not using an agent, they do more than just clipping the ticket.

Both parties should get a good valuation so you can compare the two.

Get a building inspection done so you have no suprises ( they need to get their own for independance )

While saving $40k or so is nice, there are some leagal headaches you open yourself up for hence speaking to a lawyer.

John

What area are you in and what was you house worth? 100k extra would certainly be nice, I can't see that happening with our house though being a 3 bedroom 1950's house in Hornby Christchurch.

We were in New Windsor, Auckland. 1966 2 Bedroom duplex unit.

John

I know enough to be dangerous

Geektastic

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#3124728 7-Sep-2023 17:40

Like the Curate’s egg, agents are good in parts.

A good one is excellent and well worth the cost. The hard part is finding a good one…

ratsun81

508 posts

Ultimate Geek

#3124736 7-Sep-2023 18:37

David321:

I am interested in two things, what would be a reasonable way to agree on a value for our house, we don't want to rip anyone off but we also obviously want what it's worth (at least), I figure getting a private valuation would be the way to go and setting the price at that, but I have heard that sometimes these are inaccurate? Not sure how true that is though as I dont think banks would request them if they were not accurate?

The second thing is, apart from the sale and purchase agreement which would would be done by lawyers, is there anything else that needs to be done, eqc or otherwise? I feel like this is ne of those things where if something important is missed it could have big implications (or am I overthinking it?). I am a bit of a novice when it comes to this, I have never sold a house, weather through an agent or not.

The wife and i purchased our property privately.

What we did as far as pricing was between the two parties we both got independent valuations done on the property. Once we had this we sat down presented our valuations and for us as the purchaser we proposed to meet in the middle In our case ours was lower and theirs higher... If that was not agreeable we were willing to pay for a 3rd valuation to make sure it wasnt erroneous.

As far as purchasing goes we did add clauses such building inspection. This did turn up issues which we raised and the seller was willing to pay to fix these and put in with our agreement that it had been fixed to a reasonable standard.

For property conveyancing this all can be organised by most lawyers. However it wouldnt be a bad idea to get one that has worked on private sales in recent times as they might have advise you hadnt thought of.

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